Today, the
Department of Labor released their latest read of Joblessness showing seasonally adjusted “initial” unemployment claims increased by 7,000 to 480,000 claims from last week’s revised 473,000 claims while “continued” claims increased 5,000 resulting in an “insured” unemployment rate of 3.9%.
Today’s results, though still significantly elevated, continues to indicate that the descent to both initial and continued claims is continuing in earnest resulting in an almost textbook peak.
At this point, we are either in the "post-crisis" recovery or the "eye before the storm" of a double-dip.
Could the worst of the job-shedding be behind us? Is a major disappointment shaping up for 2010?
We will have to wait to find out.
Clearly, careful attention needs to be paid to these indices to see how they reflect the state of the job market as we move further into the end of the year and start of 2010.
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The following chart shows the recent trend in initial non-seasonally adjusted initial jobless claims with the year-over-year percent change acting as a rough equivalent of a seasonally adjustment.
Historically, unemployment claims both “initial” and “continued” (ongoing claims) are a good leading indicator of the unemployment rate and inevitably the overall state of the economy.
I have added a chart to the lineup which shows “population adjusted” continued claims (ratio of unemployment claims to the non-institutional population) and the unemployment rate since 1967.
Adjusting for the general increase in population tames the continued claims spike down a bit.
The following chart (click for larger version) shows “initial” and “continued” claims, averaged monthly, overlaid with U.S. recessions since 1967 and from 2000.
As you can see, acceleration to claims generally precedes recessions and vice versa.
Also, acceleration and deceleration of unemployment claims has generally preceded comparable movements to the unemployment rate by 3 – 8 months (click for larger version).
In the above charts you can see, especially for the last three post-recession periods, that there has generally been a steep decline in unemployment claims and the unemployment rate followed by a “flattening” period of employment and subsequently followed by even further declines to unemployment as growth accelerated.
This flattening period demarks the “mid-cycle slowdown” where for various reasons growth has generally slowed but then resumed with even stronger growth.
Until late 2007, one could make the case (as Fed chief Ben Bernanke did on several occasions) that we were again experiencing simply a mid-cycle slowdown but now those hopes are long gone.
Adding a little more data shows that in the early 2000s we experienced a period of economic growth unlike the past several post-recession periods.
Look at the following chart (click for larger version) showing “initial” and “continued” unemployment claims, the ratio of non-farm payrolls to non-institutional population and single family building permits since 1967.
The most notable feature of the post-“dot com” recession era that is, unlike other recent post-recession eras, job growth had been very weak, not succeeding to reach trend growth as had been minimally accomplished in the past.
Another feature is that housing was apparently buffeted by the response to the last recession, preventing it from fully correcting thus postponing the full and far more severe downturn to today.
It is now completely clear that the potential “mid-cycle” slowdown that appeared to be shaping up in late 2007, had been traded for a less severe downturn in the aftermath of the “dot-com” recession, and resulted, instead, in a mid-cycle meltdown.
Today, the Federal Reserve released their monthly read of industrial production showing a notable increase with total industrial production climbing 0.80% from February and rising 5.88% above the level seen in March 2010.
Looking at the most recent OECD economic indicators, Greece makes by far the weakest showing in all the Eurozone appearing to have clearly collapsed into recession.
Looking at the latest release of the OECD economic indicators for China, it appears that the massive jump in economic activity seen since the panicky period of late 2008 has drawn to a close.
As we all know, the Fed has taken unprecedented measures to “rescue” the economy from the “brink” of destruction but while the latest efforts have been truly extraordinary, it was only some six years ago that the Fed embarked on a similar operation in the wake of the dot-com collapse.
While today’s jobless claims report continued to show a steady trend down to both initial and continued unemployment claims with a nearly textbook peak shaping up, considering the federal extended claims data offers a more dire view of the state of the job market and of the economy as a whole.
Today, the Bureau of Economic Analysis (BEA) released their third and final installment of the Q3 2009 GDP report showing that the economy expanded with GDP increasing at an annual rate of 2.2% from Q2, a significantly slower rate than the 3.5% originally reported in October's fictitious preliminary release.
Against the backdrop of historically low interest rates and government stimulation, "resilient" participants in property markets in both the United States and the United Kingdom responded with nothing short of jubilance.
Subtitle: MA Unemployment … Peaking out or About to Pick Up!
Today’s release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that national economic activity contracted again in November with three of four component indices declining and with the personal consumption and housing component showing the weakest results.
Today, the Federal Reserve Bank of Philadelphia released the results of their Business Outlook Survey for November showing a continued increase in manufacturing activity with the current activity index still indicating expansion with a reading of 20.4.
Also, today’s results show that any recent parallel to the stagflationary eras of the 70s and early 80 which had given way to a stronger stag-deflationary force, and then mildly inflationary inline with the government stimulus now appears to be, at least temporarily, looking marginally double-dipish as latest release shows predictions on future employment flattening.
The following chart (click for larger) shows these measures during the last stagflationary era seen between 1976 – 1980. Notice the clear divergence of rising prices and falling growth.
Today’s results of the Conference Board’s Leading Economic Indicators showed another monthly increase climbing .9% compared to October bringing the annual increase to 5.96% and leaving the index at a level of 104.9.
Today, the Department of Labor released their latest read of Joblessness showing seasonally adjusted “initial” unemployment claims increased by 7,000 to 480,000 claims from last week’s revised 473,000 claims while “continued” claims increased 5,000 resulting in an “insured” unemployment rate of 3.9%.
Historically, unemployment claims both “initial” and “continued” (ongoing claims) are a good leading indicator of the unemployment rate and inevitably the overall state of the economy.
The following chart (click for larger version) shows “initial” and “continued” claims, averaged monthly, overlaid with U.S. recessions since 1967 and from 2000.
Also, acceleration and deceleration of unemployment claims has generally preceded comparable movements to the unemployment rate by 3 – 8 months (click for larger version).
In the above charts you can see, especially for the last three post-recession periods, that there has generally been a steep decline in unemployment claims and the unemployment rate followed by a “flattening” period of employment and subsequently followed by even further declines to unemployment as growth accelerated.
The most notable feature of the post-“dot com” recession era that is, unlike other recent post-recession eras, job growth had been very weak, not succeeding to reach trend growth as had been minimally accomplished in the past.
Subtitle: Bounce Looking Wobbly
Here are the seasonally adjusted statistics outlined in today’s report:
Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing generally flat results.